Member Info for rivaldo

Good drilling news overnight from CAPD investee company Awale's Odienne project, where CAPD are the drilling contractor:

Https://money.tmx.com/quote/ARIC/news/7422487696303553/AwalxE9_Reports_High_Grade_Gold_at_Charger_Target_OdiennxE9_Project

"Awalé Reports High Grade Gold at Charger Target, Odienné Project

PR NewswireAug 21, 2023 8:30 AM EDT"

"Drilling results from Charger and Sceptre East continue to deliver great results. We are happy to see another 100 gram-meter interval within 65m downhole width of mineralization at Charger, which included 12m at 4.9 g/t Au. We await results from a further 6 holes at Charger and see it as a significant high-grade target that can advance toward resource development drilling in the coming year. Additionally we eagerly await results over the ensuing months for the new Lando, Sceptre Main and BBM targets.

At Scepter East, its sheer scale and potential is coming to light. Turning the rig 90 degrees and drilling West to East in the final hole for the program returned a high chalcopyrite/molybdenite vein density, with the hole ending in mineralization at 365m . These early holes provide a better understanding of the system's controls on copper and gold mineralization. We are still learning about the geometry of Sceptre East but these first holes are the critical steps in developing our model, said Andrew Chubb , Awalé Resources CEO."

On 21st June - almost on the half year date - TST stated:

"Trading conditions and trends remain positive and are consistent with market expectations"

Given this, there won't necessarily be any further update until the interims, which last year were on 15th September so not long to wait.

The share price has consolidated nicely around these recent highs. I'm optimistic that the interims will support further rises, particularly with the share buybacks in reserve.

Very good H1 results today, with a huge reduction in debt even excluding the VW case winnings. Housing cases are growing fast (48% year on year) and should therefore continue to improve cash flows. There's a definitive statement that further growth won't be needed to be funded from debt.

And with 8.6p EPS in H1 alone there's great confidence that forecasts for the year will be met.

At these depressed levels ANX would seem to offer minimal downside and potentially large - and quick - upside.

With DBAY in the background holding 28.51%, perhaps this is the time for them to raise to 29.99% and/or come back in with another bid.

WH Ireland have increased their FY23 PBT forecasts by 40% to £25.2m (from £18.1m) and raised EPS to 15p from (11.8p).

Good to see the earnings-enhancing acquisition of VGS (historic $4m PBT) has now completed:

Https://uk.advfn.com/stock-market/london/accesso-technology-ACSO/share-news/Accesso-Technology-Group-PLC-Completion-of-Acquisi/91834459

Allenby Capital's new note reiterates their 90p share price target.

They forecast 4.28c EPS this year, with a $9.39m closing cash pile, i.e around 8.4p per share. The ex-cash P/E is therefore only 10.6 for this year.

They summarise:

"– Operational highlights:

Antennas saw new orders in military for existing product lines and requests for new solutions, across new and existing customers. MTI’s innovative ABS antenna for 5G backhaul is being evaluated by three tier one radio manufacturers and two

tier two customers. The opening of the Indian market for E-Band 5G backhaul has created a substantial multi-year opportunity, although orders remain sporadic, and MTI recently established a new local subsidiary. The Mottech division secured two longer contracts in April with an existing customer, a large Israeli municipality, worth $2.2m over five years, and fountain control also offers growth opportunities in an adjacent market.

– Outlook: MTI’s three divisions all enjoy strong medium term growth drivers – increased defence spending (Antennas and MTI Summit), water scarcity (Mottech) and the ongoing 5G roll out (Antennas). The outlook for defence is particularly strong (representing c. 44% of group H1 revenue (FY22: c. 37%)) and MTI’s design wins typically result in multi-year revenue opportunities. Forecasts remain unchanged with H2 growth expected at the top and bottom lines and the current share price fails to reflect MTI’s growth potential."

Https://wp-allenby-2020.s3.eu-west-2.amazonaws.com/media/2023/08/20230815-MTI-Wireless-Edge-Ltd-MWE.L-Allenby-Capital-Interims.pdf?c3797=on

As follows:

this year : 21.29c EPS (from 20.31c)

next year : 25.00c EPS (from 22.68c) - P/E of 6.6

Here's the summary and an interesting extract or two:

"CentralNic’s H123 results showed continuing revenue growth and margin expansion, with growth now being driven more organically and across both operating segments. Partnerships could be key to unlocking growth from underutilised brands, with management winning several notable deals during the period. Our operational forecasts remain unchanged, with increases in EPS and net debt reflecting the recent £30m uplift to the share buyback programme. We believe that the current rating does not reflect the company’s cash generative mode and diverse growth prospects."

"Clear strategy for sustainable long-term growth

Currently only a concentrated portion of CentralNic’s brand portfolio drives growth. Management sees partnerships as crucial to unlocking organic growth from its underutilised assets, and it secured key partnerships with notable names such

Sovrn, Klarna, Booking.com and Shopify in the period. In Online Presence, it has

partnered with Crown Commercial Services to support the UK government’s domain infrastructure.

Management believes its Online Marketing business can capitalise on the growing social commerce market, which it forecasts will reach $80bn in sales by 2025, as social media and e-commerce giants vertically integrate into this space. Additionally, the company is aiming to better integrate operations to reduce consumer friction, potentially improving margins through operating leverage.

Valuation: Upside potential remains

On a EV/EBITDA basis, CentralNic trades at an average discount to peers of 22%

across FY1e and FY2e. We believe the current rating does not reflect the growth

prospects of the business, its increasingly diverse business mix and cash generative model. In addition, the share price does not yet fully factor in the impact of its share buyback programme."

"Over the long term, management has identified several market trends that should support continued top-line growth and margin expansion.

The first is the growing trend towards social e-commerce, illustrated by social media giants like Meta and TikTok expanding into commerce and Amazon attempting to move to social media. The company’s current marketing capabilities in social media makes it well placed to capture this trend, where management believes the market could reach sales of US$80bn by 2025.

Secondly, the company is aiming to better combine its business units to provide fewer steps and less friction for consumers. This optimisation may also lead to improved operating leverage, which could support further margin expansion.

CentralNic is also investing in its AI capabilities, which have already led to higher conversion rates and sales efficiency, according to management. These include creating an innovation hub and an internal AI Academy, supporting further technological

Berenberg have a 171p valuation and a Buy - they remain very positive:

"Shares in mining services provider Capital Ltd have room to double in price, after an in-line set of interim results, Berenberg said.

The investment bank has a 'buy' rating on Capital shares and a price target of 171 pence per share. Capital was down 2.8% at 83.00p on Wednesday afternoon in London. The stock is down 13% over the past 12 months.

London-based Capital on Wednesday reported pretax profit of USD23.4 million for the six months that ended June 30, up 55% from USD15.1 million a year before, on revenue of USD154.3 million, up 12% from USD138.1 million.

Earnings before interest, tax, depreciation and amortisation, adjusted for the accounting treatment of leases, rose 10% to USD43.9 million, from USD39.9 million a year before, though the Ebitda margin narrowed marginally to 28.5% from 28.9%.

The results were in line with guidance that Capital had given last month, with the revenue figure having been already provided by the company. Berenberg said Ebitda of USD43.9 million was in line with its own estimate of USD43 million.

Capital held its interim dividend at 1.3 US cents, which also was as Berenberg had expected.

Looking ahead, Capital guided for full-year revenue of USD320 million to USD340 million. This would be up from USD290.3 million in 2022. Both Capital Drilling and Capital Mining expect to see revenue growth in the second half of the year, it said, due to the start or ramp-up of existing contracts. These include the potential restart of disrupted operations at the Meyas gold project in Sudan.

"Capital has delivered a solid H1, underpinned by continued strong performance on the Sukari waste mining contract, and in spite of the shutdown of operations at Meyas Sand following the escalation of conflict in Sudan," commented Berenberg analyst Richard Hatch.

Capital has mining services contracts with London-listed Centamin PLC for the Sukari gold mine in Egypt. These were expanded at the end of 202.

"We continue to be encouraged by Capital's consistent addition of both drilling and mining contracts on high-quality assets," Hatch said."

The IC tip featured earlier is subscription-only, so....

"CentralNic defies advertising gloom

Can AI be the secret to growing profits against a darkening macro backdrop?

August 14, 2023

By Jennifer Johnson

Aim-listed internet services group CentralNic (CNIC) has evidently made shareholder returns a priority in the past few quarters. Its inaugural final dividend of 1p was paid out in mid-June and the company announced a second share buyback programme just a few weeks later.

This largesse has ostensibly come at a cost – with leverage growing to 1.0 times pro-forma cash profits, up from 0.9 times previously. Meanwhile, net debt increased by almost $12mn (£9.5mn) to a $68.2mn in the six months to the end of June 2023. Management does not appear to be concerned, however, particularly given the company’s growing emphasis on using artificial intelligence (AI) across its operations.

CentralNic’s online marketing business, which accounted for over 90 per cent of its first-half sales, creates AI-generated “online consumer journeys”. In practice, this means it aims to convert ad campaigns on search engines into actual ecommerce transactions. The group notes enthusiastically that this market is estimated to be worth $80bn in the US alone by 2025.

In its interim results, the company’s directors said they expect it to trade “at least in line” with current market expectations for the full year. This might be difficult for some investors to believe, given advertising budgets famously get slashed during most economic downturns. But the group is showing no real signs of a sales slowdown at present.

Adjusted operating cash conversion did fall to 94 per cent in the first half (from 100 per cent last year) – although this is hardly an overly worrisome development. With the shares trading on just 7.8 times predicted full-year earnings, there isn’t much to lose here. Buy."

Part 2:

"Earnings guidance maintained

Importantly, the directors are maintaining full-year guidance of 11 per cent growth in pre-tax profit to $4.8mn, which points to second-half pre-tax profit rising 18 per cent to $2.7mn on 13 per cent higher revenue of $26.7mn. On this basis, expect annual earnings per share (EPS) of 4.28p and a hike in the payout from 3¢ to 3.2¢ (2.5p). The dividend is rock solid, too. Net cash increased by 20 per cent to $6.25mn in the first half, and analysts at Allenby Capital expect a further rise to $9.4mn (8.35p) by the year-end, buoyed by strong cash generation.

So, with earnings guidance maintained, and the shares rated on a cash-adjusted forward price/earnings (PE) ratio of 7.5 and offering a 6.2 per cent prospective dividend yield, the share price drift since the 2022 annual results (‘A lowly rated technology group offering a prospective 5.5% yield’, 13 March 2023) is worth exploiting. Buy."

Here's Simon's Thompson's tip (note the currency error for the EPS...fine apart from that) - part 1:

"MTI boosted by defence spending and offers 6% yield

The technology group is set for another year of growth, but is only priced on a cash-adjusted PE ratio of 7.5 and pays a chunky dividend, too

August 15, 2023

By Simon Thompson

First-half pre-tax profit up 3 per cent to $2.1mn on slightly lower revenue of $22.4mn

Strong performance from defence sector-related activities

Second-half pipeline supports 11 per cent annual pre-tax profit growth

First-half results from Israel-based technology group MTI Wireless Edge (MWE:41p) highlight the benefits of diversification. For example, the group is benefiting from the increase in government defence budgets across the world following Russia’s invasion of Ukraine. Its antenna division trebled its operating profit to $0.28mn (£0.22mn) on revenue of $5.8mn in the six-month period, buoyed by new orders from the military sector. Chief executive Moni Borovitz expects the momentum to be maintained in the second half.

The antenna business also provides 5G network backhaul antenna systems. Although this market was relatively soft in the first half, MTI has materially increased its sales prospects by developing an automatic beam steering antenna solution that adapts to any small movements caused by different climate conditions. It is now working with three tier-one radio manufacturers and two tier-two customers to prove out the system.

The group offers investors exposure to the themes of climate change and water scarcity, too. MTI’s wireless water management systems division reported 11 per cent higher first-half operating profit of $0.96mn on slightly lower revenue of $8.7mn, the improved level of profitability reflecting price increases and the benefit of costs being in shekels in a strong dollar environment. This year’s heatwave across continental Europe, and the need for countries to use water resources more efficiently, can only be positive for sales prospects. The business has started the third quarter well.

The strength in both divisions offset weakness in MTI’s Summit electronics division, which represents 40 international suppliers of radio frequency/microwave components. Divisional operating profit declined a third to $0.78mn on 5 per cent lower revenue of $8mn, mainly due to delays with two projects. However, one has since been completed and the other is well under way, so expect a much improved second-half performance. Also, defence-related activities represent the majority of the unit’s revenue base, so increased government military spending is underpinning a strong pipeline of orders and design wins."

Per Mark Watson-Williams on Master Investor:

Https://masterinvestor.co.uk/equities/centralnic-group-the-money-machine-continues-apace/?mc_cid=edf7cd53c4&mc_eid=db9f9bbaf2

Conclusion:

"My View – A Totally Under-Rated Money Machine

As I have said so many times before, this group really is a veritable money machine.

The growth in its annual recurring revenue, running at 99%, is magnificent and must not be ignored – in fact, I believe that it is what will underwrite its substantial organic growth in the years to come.

In due course, following completion of the current share buyback programme, I would expect to see the group steadily increase its dividend payments, its maiden payment of 1p a share was made in June.

The group will be holding a Capital Markets Day to celebrate its tenth anniversary since its 2013 IPO, on Monday 4th September.

The next Corporate event after that will be the Q3 results due in October.

Price-to-earnings of 7 times is ridiculously low for such an advanced technology group that is generating so much cash, literally 24 hours a day, 365 days a year.

I repeat that I now see the groups shares, now 131.20p, rising gradually back above the 160p level before slowly scaling over 200p within the next year or so."

Excellent - though unfortunately subscriber-only except for the intro:

Https://www.investorschronicle.co.uk/ideas/2023/08/15/mti-boosted-by-defence-spending-and-offers-6-yield/

Tamesis have retained their 160p target price and note the current year P/E of 5.6.

They state that H1 results were "bang in line" at EBIT level and above, with EBITDA margins and net profit slightly down due to "the high growth in the MSALABS business where costs are front end loaded" and "as the business incurred a higher non-cash finance charge from its leasing arrangements".

Here's the strong outlook and a couple of interesting extracts:

"We retain our target price noting further ongoing consolidation in the sector with the Perenti offer for DDH1 in Australia. As in the mining industry, consolidation clearly bodes well for the services business. We also believe that the increase in size and diversification of Capital’s business begets growth in a virtuous cycle that is hard to break (assuming quality is delivered). It basically allows Capital

to leverage a greater offering of products into a larger clients base both by size and geography. This thematic has much further to run."

"MSALABS relationship with Chrysos continues to deliver. MSALABS now has the largest international network of the highly successful and popular Chrysos PhotonAssay technology which continues to grow. The company is guiding to 21

PhotonAssay units by 2025 vs six by YE 2022. Each Chrysos unit is expected to generate annual revenues of US$3-5 million so we are looking at c$80m+ of revenue from MSALABS vs just $3m in 2019. This revenue growth has come at minimal capital

outlay. As such we would argue this side of the business has similar characteristics to a typical tech company which implies double digit EBITDA multiples."

"Positive outlook. We have gone through the drivers of growth into H2 2023 and beyond and the company’s revenue guidance of $320-$340m reflects this positive outlook. Management also notes “tendering activity remains robust across the Group with a number of opportunities progressing”

Investment Case

As has been the case for nearly every announcement in the last three years these results are strong and point to further strength and growth. The company will have increased revenue by 2.4x from 2020 this year yet the share price is 13% higher than it was in Augst 2020. With activity in the mining sector still strong and long-term contracts locked in, we see safety in the medium term revenues and margins. Meanwhile the shares are trading on PE and EV/EBITDA multiples of 5.6x and 2.6x and a dividend yield of 3.6%. This implies next to no growth in the business yet all three components continue to deliver."

"On a comparative basis – see Fig 3 below – the company trades at a discount to its peer group albeit we would note the whole sector has derated. We would also point out that the table understandably suggests a bigger and more diversified business carries a higher multiple. We expect this will evolve with the Capital share price and/or we may see further consolidation."

The H1 headline figures make good reading, with EPS up almost 100% to 8.9c (from 4.7c)!

The EPS adjusted for investment gains is 8.8c, and the outlook confirms the revenue guidance, so given 7p EPS in H1 CAPD look on course to meet or beat Tamesis's forecast of around 14.8p EPS this year, or a P/E of just 5.8.

Net debt is up as guided due to the Ivindo contract win and consequent equipment purchasing, and the investment portfolio is now worth $42m against the £162m m/cap, and excludes any gains from the likely Allied Gold IPO.

Whatever the figures, the outlook and the general sense of the interims is full of confidence for both the drilling and services divisions.

And MSA Labs/Chrysos looks transformational and simply unrecognised by the market.

Looks like a few bored short-term traders exiting this morning, with the price down 2p on extremely small volumes given we know MWE isn't the most liquid stock.

Shore Capiral have retained their 90p price target and current forecasts as follows (extracts):

"Conservative forecasts: We have consistently highlighted since we initiated coverage on MTI in May 2022 that MTI has a very strong financial platform, which it uses to grow sales both organically and through acquisitions. Any new business is expected to be incremental to margins and profits in the first year. In our view, the group has demonstrated this over the last 15 months with the organic growth in Summit in 2022 boosted by the PSK acquisition, while the H1 results for FY23F have shown good adj. EBIT progress for Mottech and Antennas. At the time of the FY22A results in March, we maintained our group forecasts for FY23F and FY24F and introduced numbers for FY25F. We continue to forecast sales and profit progress in each forecast year. Obviously, we have not assumed any further acquisitions in our forecasts, so given the company’s record of earnings enhancing deals, we would view any M&A as likely to boost forecasts and shareholder value."

""Outlook and valuation:

In the March 2022 note we also highlighted that each of the divisions has growth drivers with, in our view, Mottech particularly well placed to potentially see stronger demand than we forecast for its water management and control software. Today’s result statement highlighted the strong prospects for Mottech in Italy and France. Typically, the software improves the efficiency of irrigation systems, while reducing the cost of operating them. The Antenna division is likely to benefit from the rollout of 5G across the world, as and when it happens, as MTI already supplies seven of the top ten operators with its technologies. We would also expect to see continued good demand for Summit/PSK with its defence-related products and services as demonstrated by the news that two key PSK projects have already made significant progress in Q3 FY23F.

Along with many stocks on AIM, the share price has drifted lower during 2023. We maintain a 90p fair value on the basis of a DCF analysis, which is corroborated by MTI achieving an FY23F EV/EBITDA multiple of 11.2x (the average of our peer group). We note also that the prospective 5.9% dividend yield for FY23F should also provide strong support."

A steady and solid H1 in the current climate, with EPS increasing 9% to 1.99c and confidence in not only meeting expectations for the year but also going forward.

With the usual H2 weighting, plus delayed PSK contracts benefitting H2, there's a possibility that results will beat expectations of 4.2c EPS.

The cash pile has increased nicely to $6.25m, which is almost 6p per share in itself.

On an ex-cash P/E for this year of just 11 MWE are good value, but need to show in H2 that all the obvious opportunities in 5G, water and defence are coming to fruition given that each division seems incredibly well placed to thrive.

Hopefully a sign that the institutional presentations post-results went well.

J Browne have been appointed to carry out seven months of works by Affinity Water and will be working 7 days a week for that period in a major water infrastructure upgrade around Stansted:

Https://www.bishopsstortfordindependent.co.uk/news/stansted-faces-eight-months-of-winter-roadworks-9324078/

Very strong H1 results this morning.

With 11.37c adjusted EPS in H1, CNIC are well on track to beat Zeus's forecast of 21.3c EPS this year, which Zeus themselves say is conservative.

Cash flows remain terrific, if not quite as high as previously, and are expected to normalise higher again in H2 - CNIC would have reduced net debt by almost $21m without the buybacks, divi and deferred consideration.

CNIC themselves state they're trading "at least" in line with expectations, setting up a beat for the year.

I note an increase in the mentions of AI in the statement.......

CNIC remain exceptionally cheap imho given the cash flows, low rating, digital expansion potential etc.

Great new article by the Private Punter - looks like further acquisitions are on the way:

Https://martinflitton1.wixsite.com/privatepunter/post/sticking-with-sdi-group-10-08-23